Things You'll Need:
- The fastest Internet access you can buy
- Access to an ECN (electronic communication network)
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Step 1
Buy a large volume of stock, bypass a middleman broker and post your shares directly on an ECN. When you have a buyer, the ECN will take a fee and kick you back a rebate. Hence you'll earn a rebate trading profit.
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Step 2
Get out when you can post even a tiny one- or two-cent profit. Waiting for larger profits usually results in a net loss, since the stocks traded on ECNs are so very liquid. If you see a price start to rise and you want to wait for a profit, rest assured that other rebate traders are watching the same price and may cut out before you do. The key is to take a low rebate and get out ASAP.
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Step 3
Know that it's not whether the stock gains or loses in a day, it's how many transactions you facilitate that allows you to take advantage of the rebates offered by ECNs. Use your access to ECNs in every time zone to maximize your day trading profit.
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Step 4
Trade in as much volume as possible, since rebates can be a fraction of a cent per share. Volatile, frequently traded stocks are usually chosen by rebate traders, since small numbers of trades will rarely yield a worthwhile profit, even if they are very large trades. This methodology relies on frequency rather than size.
